We’re all
familiar with Buy Now Pay Later, but what
about Buy Cheap Pay Later?
The ugly
side of the web is that online retailers can set up shop using virtual
smokescreens to disguise the true amateurism of their operations, something a
bricks and mortar store can’t do so easily.
Customers
are particularly disloyal when it comes to buying electrical goods online and
price is a major player in customer choice.
Consumers find the cheapest price they can using online tools, shopping
services or search engines. For example,
using a price comparison site such as Kelkoo you find the cheapest price and purchase your camcorder from Digital Delights (aka Jon from Bolton). Elated with your cheap find, 20% cheaper than
anywhere else, you boast to your mates your great find. This part is ‘Buy Cheap’.
Your smug
grin soon comes back to haunt you as your bargain camcorder arrives damaged and
Jon demonstrates why he wouldn’t even pass a GCSE in basic Customer
Services. The only way to contact Jon is using an online
form which Jon might as well filter direct to his deleted items. Now the ‘Pay
Later’ part kicks in.
There are
telephone calls (often premium lines), packaging, postage, insurance etc Add to
that the cost of your increased nicotine intake as you hammer out your
frustrations on the keyboard. ‘Dear Sir,
I have been trying to contact you for 6 weeks …’
Why does
this happen? Good Customer Services
doesn’t come cheap. There’s recruitment,
training, support infrastructure, CRM systems etc. As retailers enter a price war the profit
margins are reduced and something has to give.
Inevitably it’s Customer Services that gets trimmed first.
Members of
this Buy Cheap Pay Later philosophy have aggressive price cutting strategies
and a ‘sod you’ customer services policy to go with it.
I can’t place
the blame in the hands of the price comparison sites as they do exactly what they
set out to do. But what if the price
returned is the sum of the base price + x, where x is the cost of the Pay Later
element. The Pay Later cost figure would require a complex algorithm based on
consumers customer service data. Now we’re moving in to familiar territory as
it becomes a Web 2.0 thing. If the site
comparison sites can leverage consumer feedback then this will advance the
algorithm and produce a value that has real meaning. Can this be done? Yes, but it won’t be easy.
I’m not
talking about rating the retailer out of 5 but an online service where every
product you purchase is registered and the product lifecycle is recorded,
including all touch points and costs.
This product management service would give price comparison sites
instant credibility. It could also open
up a myriad of services (warranty, insurance, replacement etc) for managing
your product portfolio but I’ll leave that for another blog.
All this
goes back an earlier article I wrote on the Internet World Exhibition 06 where
Jonathan Wall, the Marketing Director from Dabs, presented ‘how can you create
loyalty in a disloyal online world?’ He won me over and I’ve since
pledged my future purchases to Dabs.
Maybe I was vulnerable having too been on the receiving end of the ‘sod
you’ approach and Jonathan’s speech was perfect time to restore my faith that
some companies do put customers at the heart of their business strategy. Or was I searching for a saviour and he just
so happened to present at the right time?
I’m not so sure. Had the Marketing
Director from Digital Delights spoken about customer services then it would be
like listening to Harold Shipman doing a talk in Care in the Community.
Hopefully
things are changing. Jonathan Wall said
that they recently ran a survey and found that only one in 5 purchases by shoppers
using price comparison are at the cheapest price returned. This is good news as consumers go back to old
fashioned values where a friendly face and good service is priceless.
As I get
ready to purchase a Notebook I’ll be heading straight over to Dabs, unless of
course I find a better price!